We know self-employed borrowers have difficulty obtaining mortgage financing, especially for a second mortgage. That’s why our Bank Statement Closed-End Second Mortgage provides a creative solution—allowing you to access up to 90% CLTV on your primary home without relying solely on tax returns.
Real-Life Scenario: Debt Consolidation & Home Renovations
Our borrower, a self-employed individual for the past six years, wanted to:
- Consolidate high-interest debt
- Replace their roof
- Upgrade their kitchen
Their existing first mortgage had a favorable 3.99% rate, and they wanted a 25-year second mortgage to align with the remaining term of their first lien.
Traditional Financing Roadblocks
- Debt-to-Income (DTI) Ratio: 61% (based on tax returns)
- FICO Score: 741
- CLTV: 90%
- Loan Amount Needed: $190,000
With conventional underwriting, the high DTI made approval difficult.
Our Bank Statement Solution
By using 12 months of bank statements (personal or business) instead of tax returns, we:
- Reduced the DTI to 49% (using qualified deposits)
- Approved the $190,000 second mortgage
- Allowed the borrower to keep their low-rate first mortgage intact
Key Benefits of Our Bank Statement Second Mortgage
- 12-Month Bank Statements – No tax returns required
- DTI Up to 50% – More flexibility for self-employed borrowers
- AVM (Automated Valuation Model) Allowed – For loans under $400,000
- Zero Reserves Required – No need for additional cash reserves on the subject or other financed properties
Ideal for Self-Employed Borrowers
Whether you need funds for home improvements, debt consolidation, or other financial goals, our Bank Statement Second Mortgage offers a streamlined path to approval.
